Abstract

This paper discusses problems associated with the estimation of market wages for females when the primary aim of the estimation is to provide the wage variable for a labour supply equation. The issues are discussed in the context of Mincer's (1974) human capital earnings function, with the major focus being upon methods of correcting for measurement errors and selectivity bias.

Empirical estimates are undertaken using data provided in the Australian Bureau of Statistics Special Supplementary Survey No.5 which was carried out in June 1981.